Price, product, promotion and place are contributors to how a company will perform in the market. Coca Cola and Pepsi are two competing countries in the Soft drink market. They have been rivaling for many years over the market and each company has been forced to apply different strategies on their products, the price they charge on their products, the promotions they have in the market and how they place the product.
The coca cola and the Pepsi company have been rivals for over 100 years. The companies not only are rivals in the soft drinks but they have diversified their products and competition to also include other beverages such as coffee, water juices and other drinks. The product that the two companies are similar an individual is hard to distinguish the difference between the two products. The price strategy is of Coca Cola is cheaper drinks globally unlike Pepsi
Coca cola and Pepsi were both formed in the later part of the 19th Century and before 1950 both concentrated on Pepsi and Coca cola brands of soft drink and coca cola had a large marketing share. In 1950 Pepsi introduced a 26 ounce bottle for and used catchy slogans and intense competition. This helped Pepsi to improve its market share against Coca Cola. In 1972 Pepsi used a marketing strategy called the Pepsi challenge in Dallas and later national wide and led to Pepsi having a more market share than Coca Cola for the first time.
This caused Coca Cola to introduce Diet coke in 1982 and had a lot of success in the US. To expand both companies introduced Fanta, sprite and Pepsi introduced Teem, Mountain Dew and others and they also reintroduced more drinks. This introduction of new products helped to increase competition in the market.
In the 90’s Coca cola gained significant market share against Pepsi. Coca Cola had a market share of 51% and Pepsi 21%. This greatly helped the to boost the revenue of Coca cola since it was not doing well domestically in the US where its market share was 20% and 17.3% for Pepsi Company.
While Coca Cola has concentrated its efforts both in the US and in the global market, Pepsi concentrated more on the American market. This has made Pepsi’s margins to decline due to the changing of trends in the US economy. The global market gave a lot of revenues to the Coca Cola Company and this revenue was used to offset low domestic sales. Coca cola could also afford low prices in the American market.
Some of the reasons that contributed to Coca Cola dominance in the international market was its investing strategy when it was investing in the in the foreign market. Pepsi invested a lot of revenue in the foreign market while Coca Cola appointed bottlers with a lot of experience. This neutralized Pepsi as a threat in the international market. The second world war strategy adopted by Coca cola where they gave all American servicemen their drinks at 5 cents only and with the assistance of the American country it built bottling companies wherever the servicemen were across the world. With the cheap price, and its great popularity with most American servicemen and with the eventual winning of the war by America, Coca Cola was easily adopted throughout Europe and Asia. Coca Cola is still the most popular and dominant in this market it was introduced by the servicemen.
The methods of marketing between Pepsi and Coca cola is almost similar, is one uses a celebrity to endorse a product the other will also use a celebrity. Both companies target the same market segment since their products are very similar and the difference in the price is not very different.